Correlation Between Empire State and Keepers Holdings
Can any of the company-specific risk be diversified away by investing in both Empire State and Keepers Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Empire State and Keepers Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Keepers Holdings, you can compare the effects of market volatilities on Empire State and Keepers Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Empire State with a short position of Keepers Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Keepers Holdings.
Diversification Opportunities for Empire State and Keepers Holdings
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and Keepers is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Keepers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keepers Holdings and Empire State is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Empire State Realty are associated (or correlated) with Keepers Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keepers Holdings has no effect on the direction of Empire State i.e., Empire State and Keepers Holdings go up and down completely randomly.
Pair Corralation between Empire State and Keepers Holdings
Given the investment horizon of 90 days Empire State Realty is expected to generate 0.76 times more return on investment than Keepers Holdings. However, Empire State Realty is 1.31 times less risky than Keepers Holdings. It trades about 0.13 of its potential returns per unit of risk. Keepers Holdings is currently generating about -0.05 per unit of risk. If you would invest 1,060 in Empire State Realty on September 1, 2024 and sell it today you would earn a total of 36.00 from holding Empire State Realty or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Empire State Realty vs. Keepers Holdings
Performance |
| Timeline |
| Empire State Realty |
| Keepers Holdings |
Empire State and Keepers Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Keepers Holdings
The main advantage of trading using opposite Empire State and Keepers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Keepers Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Keepers Holdings will offset losses from the drop in Keepers Holdings' long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Keepers Holdings vs. Jollibee Foods Corp | Keepers Holdings vs. Allhome Corp | Keepers Holdings vs. Suntrust Home Developers | Keepers Holdings vs. Philippine Savings Bank |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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